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Crypto Arbitrage Trading and its Benefits

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@alokkumar121
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Trading is a way to make money but its not easy and it certainly requires some sort of study and analysis before we initiate a trade. If things don't go the way we planned then it can bring us losses and we may lose money. Today in this post I am talking about a way of trade that can be done in a short time and its least risky if we follow some steps. This form of trade is called Arbitrage trading.

Arbitrage is a type of trade when we buy coins from one exchange at a lower price and sell at a higher price in another exchange. This is the way that can help us make quick money and there is the least possibility of loss. Exchnages work on global prices but still, some exchanges offer different prices on basis of demand and supply, and with arbitrage trade, we get the opportunity to take the benefit of this situation. In simple words, we can say that when two exchanges have different prices of any coin so trade between both the exchnage by any person is called arbitrage trading.

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Arbitrage is trading that exploits the tiny differences in price between identical assets in two or more markets. The arbitrage trader buys the asset in one market and sells it in the other market at the same time in order to pocket the difference between the two prices.

Since this trade needs to perform in less time so keeping higher among of investment can bring more profit. For example, if I invest 100K USD and there is a price difference of 1% then I can earn 1000 USD in less than 30 minutes which is a usual time in arbitrage trade.

Let's try to understand with the help of the below snapshot. The trader buys a coin worth 1000$ from exchnage A and sells it for $1050 in exchnage B so there is a profit of 50$ which happens in a maximum of 1 hour time. There is a transaction fee for wallet transfer is also involved but after that also we can earn a good profit with arbitrage trading.

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Benefits-

  • Easy trading without technical and fundamental analysis.
  • Profit in a short time
  • Bunch of opportunities for arbitrage trade and earning of money.
  • Easy way to create passive income
  • Profit booking in a short time.
  • Risk probability is low.

Some Points to consider-

  • We must check the transaction fee as sometimes it can be higher.
  • Need to ensure that the wallet is not in maintenance as we need to send it to another wallet.
  • Its suggested using a reputed crypto exchange for a seamless experience.
  • Some bots are also available for the same so can be given a try if they are either free or charge a small fee.

Its very important to act faster in arbitrage trade because you never know when price change and then it can be a loss-making trade. This is not for the new trader but if a person holds an account in various exchanges and knows the process to perform the trade. So if you are doing this type of trade then try to follow these points and if it can help you make some quick then its really. In simple words, we can say that Arbitrage Trading is a way to make quick money because here we need not hold anything. Its like buy and sell as soon as possible.

Thank you so much

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